Clariant earnings beat estimates

February 16, 2017 | Michael Ravenscroft

Clariant reports sales in the fourth quarter of 2016 of 1.548 billion Swiss francs, missing the consensus estimate by 1%, versus SF1.526 million in the year-ago quarter. EBITDA before exceptional items in the latest quarter was SFr235 million, up by 3% year-on-year (YOY) and 1% ahead of consensus. The EBITDA margin in the fourth quarter rose to 15.2% from 15.0% one year earlier.

Clariant reports sales of SFr5.847 billion ($5.80 billion) in full-year 2016, compared with sales of SFr5.807 billion in 2015, an increase of 2% YOY in local currency, or 1% YOY in Swiss currency. Growth was driven by higher volumes, with strong growth in care chemicals and in plastics and coatings, Clariant says. EBIT was SFr512 million in 2016, an increase of 3% YOY and 5% YOY in reporting and local currency, respectively. EBITDA before exceptional items was SFr887 million in the last year, up 4% in Swiss francs and 5% in local currency. The EBITDA margin rose from 14.7% in 2015, to 15.2% in 2016, mostly because of strong growth in plastics and coatings, the company says.

“Clariant considerably expanded its operating cash flow in 2016 while reporting sales growth and profitability improvement,” says Hariolf Kottmann, CEO. “Our good business performance was primarily achieved by means of a continued shift to high-margin specialties, the impact of the differentiated steering in plastics and coatings, as well as good cost management. For 2017, we are confident that we will achieve our targets: growth in local currency, and progression in operating cash flow, absolute EBITDA, and EBITDA margin before exceptional items in spite of a continued challenging economic environment.”

Fourth-quarter 2016 sales for the care chemicals segment were SFr378 million in Swiss francs, with local currency growth of 5% YOY. The plastics and coatings segment achieved sales of SFr594 million, up 3% in local currency. Clariant’s natural resources business reports sales of SFr345 million, a rise of 7% YOY in local currency, driven by functional materials and acquisitions in the oil and mining services business. Catalysis sales fell 6% against a high comparable base in the previous year, to SFr231 million.

Sales for the care chemicals unit were SFr1.465 billion, a rise of 5% YOY in local currency. The plastics and coatings business recorded sales of SFr2.525 billion, up 4% YOY, with “good sales performance across all regions,” the company says. Sales for Clariant’s natural resources segment were SFr1.184 million, up 2% YOY in local currency, “despite the difficult environment,” the company adds. The catalysis unit’s sales declined 8% in local currency, to SFr673 million, because of lower demand in Asia and North America, and because of portfolio mix effects, Clariant says.